Tuition at Penn State's main campus in State College is the second highest for a four-year public university in the nation, behind Oregon Health and Science University, according to The Chronicle of Higher Education. Penn State's branch campuses rank in the top 25.

Penn State's yearly tuition at State College has risen to $13,014, meaning it has doubled since 2000-01. On average, Penn State's tuition has grown by about 8 percent a year during that span, while the Consumer Price Index has gone up, on average, 3 percent a year.

Why has Penn State's tuition grown at this pace?

Penn State officials cited a lack of state money even as the university must modernize its campuses to offer the top-flight education students demand. To pay for new technology, buildings and faculty, Penn State said it faces cost increases that exceed inflation.

Critics argue that Penn State hasn't done enough to keep tuition in check. One local lawmaker suggested Penn State limit tuition increases to the rate of inflation in order to receive state money.

Penn State's tuition increases could receive some attention at budget hearings this week. Penn State and the other public four-year schools will go before the House Appropriations Committee on Monday and before the Senate Appropriations Committee on Tuesday.

State money not keeping pace

Penn State officials cite a reason for rising tuition bills: State money is taking up a smaller part of the university's funding.

Since 2000, state allocations to Penn State have fallen even as the Consumer Price Index has gone up 22 percent, said Bill Mahon, the vice president for university relations.

However, Mahon isn't taking into account money that Penn State receives from the state Department of Public Welfare's budget to support medical education.

Until 2005, the state provided money directly to Penn State for its medical school, but now that funding comes out of federal dollars flowing through the Department of Public Welfare.

When that money is included, state allocations to Penn State have risen by 5 percent between 2000 and 2008.

Citing the level of state support, Mahon said, "We can't magically make tuition stay stable. It can't be done."

Penn State's state funding in the current fiscal year was reduced by 6 percent in mid-year budget cuts. Gov. Ed Rendell has proposed keeping its funding at that reduced level next year.

Penn State President Graham Spanier said in January that the university would try to keep the tuition increase for 2009-10 close to 5 percent.

"The last thing we want to do in this environment is pass our budget challenges on to our students," he said.

Otherwise, America will continue to see rich institutions serving rich students while most students go to colleges that don't have the resources to invest in success, Wellman said.

"It's a recipe for decline, and there's no reason we should put up with that," she said.

She is hopeful Penn State will do what it can to keep down next year's tuition increase. But Wellman said it is a problem when colleges typically raise tuition above the rate of inflation each year. She said the federal stimulus money could help, but that is not a permanent solution.

"We've been in a slow-moving growing crisis in higher education finance for a while," she said. "This is an opportunity if we choose to use it for states and the feds and institutions to do some financial restructuring that they really have avoided."

She said that might entail pruning programs and making other difficult changes.

"Everybody's been papering over some pretty serious budget problems for a long time," Wellman said.

College officials say their cost increases are best measured by a Higher Education Price Index that takes into account library materials, technology and faculty salaries. That index shows costs have risen 32 percent this decade.

But state Sen. Jeffrey Piccola, R-Dauphin County, doesn't buy the idea that colleges face larger price increases than consumers. And the Senate Education Committee chairman pointed out that Penn State's tuition has increased beyond that higher education index.

"Penn State ... will charge whatever tuition will keep them receiving applications," he said. "It's a market-driven thing; that's fine ... but when you are asking the taxpayers of Pennsylvania to subsidize that, then I think we have, on behalf of taxpayers, the right to insist some inflationary controls be put in place."

Piccola has unveiled a plan to help students pay for college. It would require state-funded colleges and universities to keep tuition increases below the Consumer Price Index to receive any state money.

The governor has proposed legalizing video poker to provide grants to help students pay for college. Rendell's plan doesn't include Penn State, although he has said he would consider extending it to Penn State, the University of Pittsburgh, Temple University and Lincoln University if enough money is available.

While some might think Penn State's tuition increases represent a failure by the university to look at how it is spending money, Mahon said that is not the case.

"We're making adaptations that we need to make," Mahon said. "Sometimes it's in the form of no salary increases. Sometimes it's not building buildings that we know we need as soon as we would like."

No salary increases are planned for next year, Mahon said.

There are times when parts of Penn State's main campus look like a hard-hat zone.

Penn State has begun a $215 million Millennium Science Complex, and a $60 million law school was just completed. The $68 million business building was finished in 2005, and the $58 million information sciences and technology building was completed in 2004.

The construction projects are adding to Penn State's debt. As of Dec. 31, Penn State had $984 million in debt.

But Mahon said building projects financed over time have little impact on annual tuition increases. Besides, compared with other Big Ten schools, Penn State ranks in the middle of the pack for its academic space, he said. This is not a category where Penn State wants to be last, as it was a decade ago, nor does it aspire to be No. 1, he said.

"A lot of Penn State was built in the 1940s and 1950s, and we're in a situation where we are teaching rocket science in buildings that were constructed before Sputnik was launched," Mahon said. "Or teaching students how to build the next generation of supercomputers in buildings that went up before the first computer was built."

Penn State is atop the Big Ten in another category: It is the most expensive.

Cost-cutting isn't enough to offset years of declining state appropriations, Mahon said. Increasing tuition is the only alternative.

A flood of applicants

Penn State remains the nation's most popular university among college applicants.

JOHN C. WHITEHEAD, The Patriot-News/2008Old Main at Penn State's main campus in State College.

As of mid-February, Penn State had received more than 40,000 applications for the fall for the main campus in State College and more than 12,150 for the branch campuses. About 7,200 freshmen began classes in State College last fall.

With so many applicants, some might ask: Why worry about holding down tuition?

Anna Griswold, Penn State's assistant vice president for undergraduate education and executive director for student aid, suggested the reason cost might not deter some applicants could lie in the conversations at home.

"We encounter families who probably should say to their students, 'No, we can't afford that,' but they won't say it. They want to give them what they want," she said.

In addition to strong academics, Penn State offers "an opportunity for employment with the vast network of alumni," she said. So parents consider it worth the money.

Terry Hartle of the American Council on Education said it's no surprise Penn State's applications have soared over the last two decades. Penn State has become a stronger institution, as evidenced by college ranking services.

"We live in a market-based economy, and the market has not yet sent a signal to Penn State that it costs too much because applications go up every year," Hartle said. "There is a point where tuition sensitivity will set in, but if applications go up every year, it's hard to say you've hit that point."

Donald Heller, an associate professor of higher education and senior research associate in Penn State's College of Education, said it's impossible to pick a particular price point where the cost of a Penn State degree isn't worth the investment for all students.

"I would say that the fact that so many students are applying means that they are optimistic about the value of a Penn State degree in labor markets," Heller said.

But pushing tuition rates to that price point is not in keeping with the university's public land grant mission. That mission gives the university an incentive to keep its tuition affordable to all students, not just those with enough money of their own to pay the price.

Ashley Matio and her mother, Donna, considered the difference in debt after graduating from Penn State versus Shippensburg. She hopes to become a state trooper, and troopers' starting pay is around $50,000.

"You have to be realistic about what the starting salary is going to be," Matio said. "It doesn't require a Penn State degree."

STATE AID
The following shows the total level of state support the university received:
2000-01: $332 million
2001-02: $324.8 million
2002-03: $316.1 million
2003-04: $307.8 million
2004-05: $317.2 million
2005-06: $325.8 million
2006-07: $341.9 million
2007-08: $348.7 million
2008-09: $318.1 million*
* Does not include money that Penn State is expected to receive for its medical school